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Netflix To Step Into Spotlight, Kicking Off A Media Earnings Season Riddled With Anxiety

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Netflix will reveal its financial results from the second quarter on Tuesday afternoon, and the outcome is expected to set the tone for one of the most anxious and uncertain earnings seasons in years.The report will have “wide-ranging implications for the stock and the media ecosystem,” in the view of Guggenheim analyst Michael Morris.Last quarter, Netflix issued a warning about its second-quarter performance, saying it could shed as many as 2 million subscribers, though it continues to pace the streaming business with about 222 million worldwide.

Investors last April reacted harshly to the company’s first subscriber losses in more than a decade, punishing the company’s shares, which had already fallen from their 2021 all-time high.

Over the past six months, about two-thirds of the company’s market value has been destroyed. Wall Street has not only been scrutinizing the sudden subscriber plateau but also the traction of streaming rivals, not only former programming suppliers like Disney, Warner and NBCUniversal but from deep-pocketed tech foes like Apple and Amazon.A few items in particular will be center stage when Netflix steps into the spotlight: the subscriber narrative as well as updates on the rollout of a cheaper, ad-supported tier and efforts to curb free password sharing.

The latter two initiatives were trumpeted by the company last quarter, though the about-face on advertising after years of insisting it would never take ads left a lot of observers flummoxed, especially given the hasty and scattered way it was communicated. (Co-founder and Co-CEO Reed Hastings dropped the bombshell during the company’s video earnings interview but nothing in writing was contained in Netflix’s quarterly letter to shareholders.

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